China H-shares lead Hong Kong rebound, Sinopec jumps as CNOOC sinks

January 21, 2014 - 1:19:10 pm

HONG KONG: Chinese shares listed in Hong Kong posted their biggest gain in two months on Tuesday, led by financials as cash rates eased in the mainland after the Chinese central bank offered emergency funds to ease the latest cash squeeze.

The China Enterprises Index of the top offshore Chinese listings in Hong Kong finished up 1.8 percent in its biggest daily gain since Nov. 18.

Gains on Tuesday came after the H-share index closed on Monday at its lowest since Aug. 30.

The Hang Seng Index ended up 0.5 percent at 23,033.1 points.

China's money market rates fell sharply on Tuesday after the People's Bank of China dumped more than 255 billion yuan or $42 billion into the financial system, easing concerns that another credit crunch was underway less than a month after a late December squeeze.

CNOOC Ltd shares dived 6.3 percent in its biggest one-day loss since October 2011 after the Chinese oil giant said it is aiming for an increase in output of up to 4.3 percent this year, excluding contributions from acquisition Nexen.

The forecast was well below its average annual growth target for 2011-2015.

CNOOC shares were further hit by a downgrade from "buy" to "neutral" from Credit Suisse analysts, who also upgraded China Petroleum and Chemical (Sinopec) Corp, sending Sinopec H-shares up 4.1 percent.